The Social Market Economy: The Main Ideas and Their Influence on Economic Policy

One of the main outcomes of the “European Miracle”1 is the development of a liberal social philosophy beginning in the eighteenth century and lasting until today. The Scottish School of Moral Philosophy, the liberal classical economists from Adam Smith onwards to John Stuart Mill, as well as the French (J. B. Say) and German thinkers of the late eighteenth and early nineteenth century (I. Kant, Friedrich Schiller, W. von Humboldt) laid the foundations of a free society. After the “European Catastrophe”, the two World Wars (1914–18/1939–1945) and the establishment of totalitarian and authoritarian regimes in Western and Eastern Europe, an unexpected renaissance of liberal thinking began. It was lead by a small group of lawyers, economists and social philosophers in the Western World and its early origins can be traced back to the thirties and forties. It is to be hoped that this philosophy will also spread, following the annus mirabilis 1989, into Middle and Eastern Europe. Among the twentieth century scholars, who further developed the ideas of a free (or good) society, one could name Bresciani-Turroni, de Jouvenal, W. Eucken, F.A. von Hayek, Karl Popper, W. Röpke among others.